Buffett Boosts the Industry: 3 Bank Stocks on the Move

Bank of America ran so fast for so long in 2012 that it forgot what taking a break looks like. The stock came up over 100 percent for the period between January 3, 2012 and January 2, 2013 — and then fell nearly 5 percent since the beginning of the New Year.

Shares dropped sharply on Wednesday following a downgrade from Credit Suisse. Analysts expressed some reasonable concern that the bank’s mad growth rate can’t be maintained through 2013, and that some overhanging liability remains because of the bank’s involvement in fraudulent foreclosure practices during the crisis.

Giving the bank — and the entire industry — a boost on Thursday is a report out of Bloomberg where Warren Buffett guarantees that the financial industry won’t get America into trouble again.

Wells Fargo will be the first major financial institution to report its fourth-quarter results this season, sending out its report before the opening bell on Friday. The bank’s status as one of the nation’s largest mortgage lenders has put it squarely in the cross hairs of both regulators and investors who have been skeptical about how the bank would navigate market turbulence in the wake of the financial crisis.

Financial stocks performed well in 2012, and while its gains were more humble, Wells Fargo was among them. Shares climbed about 23 percent for the year, but showed some signs of weakness for the quarter heading into 2013. For the last three-month period, the stock is down 1.5 percent, and shares have been volatile over the past few days.

Insiders revealed on Thursday that Morgan Stanley, the sixth-largest bank by assets, will be cutting 1,600 jobs from its i-banking division, nearly 6 percent of the headcount there and nearly 3 percent company wide. The move has been touted as just the latest in a long string of layoffs and restructuring announced by pretty much every major bank around the world.

Perhaps overshadowed by the layoff announcement, Dan Loeb of Third Point announced that he expects the stock to “nearly double” from its current trading level.